International Project of the Public Union “For Human Rights”

The Decline of Europe

PreviousNext The Decline of Europe — Part II. Corruption

Part II. Corruption

Main page Choice of Germany as the initial monitoring country Background “On the Crisis of Liberal Values and Multiculturalism in Europe” Objectives, character and methodology of monitoring Part I. Crisis of multiculturalism Part II. Corruption Part III. Violation of freedom of expression Part IV. Challenges in penitentiary, law enforcement and judicial systems of Germany, drawbacks in the legislative practice Part V. Unwarranted use of force when dispersing actions of protest Part VI. Observance of human rights in the system of education of Germany Conclusion The Public Union “For Human Rights”

During last years, especially after the “Schroeder” page in the new history of Germany, one of the basic social problems of the most developed countries of the European Union became the problem of corruption. True is that as distinguished from the countries with democracy problems, in particular, post-Soviet Republics, the corruption in Germany is not an institutionalized problem. It is, beyond any doubts, off-system problem; however, the growth of corporative corruption is an issue of increasing concern for the public opinion of the country. According to the regular polls conducted by the influential organization Transparency International, if in 2003, 45% of Germans forecasted the growth of systemic corruption; in 2007, 69% of the population voiced their confidence in the aggravation of the situation with corruption. An overwhelming majority of the residents of Germany - 77% - have expressed their discontent with measures of the Government to combat corruption. Results of the polls were mirrored in a report of the organization titled “Corruption Barometer Worldwide”.

Conclusions of the Transparency International were shared by many international organizations, particularly the Council of Europe which harshly criticized the political line of the Merkel Government. In April 2012, the CoE Group of States against corruption (GRECO) submitted a special report on corruption in Germany. GRECO was set up in 1999 by the European countries to investigate the corruption situation in the CoE member-States.

The report criticized measures of the Merkel’s Government to combat the corruption in Germany. As follows from analytical reports of GRECO leading experts who monitored the situation in Germany over the past 3 years, the German Government did not respond to recommendations and critics of the CoE. Strasburg has to address the problem of corruption in Germany arising from high-profile corruption scandals around the consortiums of Siemens, Volkswagen; construction and services sectors; legalized practice of “peculiar financial amnesty” upon the expire of 5 years following the economic crimes – a sort of the “indulgence for corrupters, etc.

Only in 2007, in the eve of the decision to examine the situation by the CoE, about 10,000 bribe-related crimes were committed, in accordance with data provided by the Federal Police of Germany. According to Jorg Zirke, Head of the Office, as a result of economic crimes, the German treasury lost approximately 6 billion euros.

GRECO experts concluded that one of the main factors that predetermined the growth of systemic corruption in Germany was the inadequacy of the country’s legislation, in particular, a criminal law to combat economic crimes. This is why financial and economic crimes make up 2% of total figure. Hansjörg Elshorst, former head of the Transparency International in Germany, said that “a bribe is a part of business in Germany.” Besides, many experts in the German corruption, particularly, those from the Business Crime Center, headquartered in Frankfurt, stress the discrepancy between the income of bureaucrats as indicated in their income statements and the property they own, which testifies to their corruption activity.  In the experts’ judgment, this tendency has intensified over the past few years.

Having regard to the fact that in the second half of 2012 the corruption in Germany has cast deep roots, Sylvia Schenk, today’s head of the German branch of the Transparency International, declared that the corruption in the country assumed so monumental proportions that “first ever in the history of Germany the country’s mass media are assessed, in terms of corruption, even more negatively than Bundestag.” According to the Transparency International expert, Germany is deficient in “integrated approach to the solution of corruption problems in the country.”

GRECO has harshly criticized the Government of Germany for its refusal to ratify the CoE Criminal Law Convention on Corruption, which provides criminal prosecution of the corrupt representatives of executive and legislative branches of power. Germany, having signed it in 1999, refuses to ratify it. In summer 2011, heated debates were held concerning the first recommendations of the GRECO; however, German MP’s did not reach consensus and did not ratify the Convention, as insisted upon by the CoE.

The CE concluded that these actions of the German Government and Parliament contribute to the creation of the caste of the elite to which no punishment for financial and corrupt crimes is extended. The report also criticized the vicious legislation, which enables political parties of Germany not to report back to the President of Bundestag unless they exceed Euro 50,000.

The UN Position

Besides, the German authorities refuse to ratify the UN Convention against Corruption, which they signed in 2003. This unprecedented decision of the legislative branch of the State power of Germany caused a harsh criticism of all the UN structures, particularly, the UN Office on Drugs and Crime.

In fact, the sabotage of MP’s declining from the ratification of the Convention has greatly damaged the prestige of the German establishment not only at the international arena but inside the country as well. The ruling coalition opposed the ratification while the SDPG stood up for the ratification of the convention, which caused a fair objection of the CDU-CSU. What prevented Social-Democrats from ratifying the Convention during the “Schroeder reign”?

This year, the German business-elite appealed to the Bundestag with a request to ratify the Convention. An open letter of the heads of 35 largest corporations was published in all German mass media and tried to persuade MP’s to join the Convention ratified by 161 states, and, therefore, to  strengthen anti-corruption measures.

Article 108 (e) of the Criminal Code of Germany regulates the punishment for act of corruption only for bribing and acceptance of bribe, bribing of votes during the election, though the UN Convention provides for broad spectrum of sanctions in the anti-corruption struggle.

The case of Peer Steinbrueck

However, the case of Peer Steinbrueck, former Finance Minister and Vice-Chairman of the SDPG, previously main opposition candidate for German Chancellor, goes to show why the German establishment is not in a hurry to ratify the Convention. This year, “Die Welt” accused Peer Steinbrueck of maintaining very close contacts with financial circles. The candidate was criticized not only by representatives of the ruling coalition but also by his party fellows – Social Democrats.

Mr. Steinbrueck himsilef has admitted that he delivered lectures in banks, insurance companies and private enterprises. He claimed that received approximately 7,000  euros for each speech. However, he declined from disclosing an exact figure of his fee. As a result, his collaboration with financial structures came into question. MP’s from various Parties demanded to amend the legislation to gain greater transparency in the matter of earnings. Besides, Steinbrueck refused to provide data on his subsidiary earnings. He pointed out that, like all married Germans, he punctiliously pays taxes, as does his wife too. In other words, the German politician resorted to the trick of Russian officials who register their illegal earnings in family members’ name, particularly, spouses. The Transparency International officially accused Steinbrueck in concealment of subsidiary earnings.

In unison with CoE experts and advocates of the Convention ratification to thus oppose the corruption–stuck civil service, well-known economist from the University of Linz Friedrich Schneider made an analysis of corruption in Germany which stunned not only the Germany’s public opinion but also drew a wide response worldwide and attracted scrupulous attention of the international community to the corruption in Germany. Economist’s calculations made on the basis of Transparency International indices uncovered outrageous facts of bribery and corruption in Germany in 2012 only: damage on country’s economy made up 250 billion euros. In an interview to the influential “Die Welt” the economist noted that “should we succeed to return the scale of corruption in Germany to the level of 2004, the damage inflicted on the German economy would be reduced by 30 billion euros.”

Besides, this year “Sueddeutsche Zeitung” caught the Government in falsifying poverty indices in the country. In September, the newspaper published an official document approved by the Cabinet of Ministers. The report was submitted by the Ministry of Labor, and in two months an amended text of the report was issued. Unexpectedly for Ministry of Labor functionaries themselves, the amended text did not contain a phrase that “private property is distributed very unevenly in Germany”. Furthermore, approaches to salaries have changed as well. Initial text indicated that salaries of highly-paid posts rose while those of low-paid posts dropped. As a result, the property exfoliation may violate fairness in society and feelings of unfairness and instability risk becoming stronger.

In place of this phrase there appeared a phrase that “reduction of actual salaries is a manifestation of structural improvements” at the labor market. This is explained as being due to the fact that in the period between 2007 and 2011 a lot of new jobs with moderate salaries were created. Thus, the jobless had the luck to get these jobs.

Also, the government decided to delete from the initial text some pieces, in particular, a reference to the fact that more than 4 million individuals received less than 7 euros per hour in 2010. Amendments were initiated by liberals. Leader of the Free Democratic Party of Germany, Minister of Economy Philip Roesler explained that the report in its initial text did not address the Government’s stand on the issue. The Ministry of Labor responded to the dissatisfaction of trade unions as saying that amendments into the documents of this sort were a routine practice. Yet according to the UN data, more than 13% of Germany’s population is living below the poverty line,. The Government of Germany claims that the unemployment in the country increasingly grows to exceed 10% in 2013.

However, the case of the new Berlin airport construction, “this nationwide disgrace”, indicates the opposite - ineffective measures of the Merkel Government to combat corruption that opened the gates for new megacorruption projects, as stressed by the CoE and UN experts. It should be noted that since the end of the 1990s Germany has been shaken into corruption scandals, particularly, waste management plant owned by Helmut Kohl. “I’m not going to tell where I took money from, and I’ll take it to the grave,” this catchword of legendary Chancellor H. Kohl evokes experts to start reasoning about the corruption in Germany.

In late July 2012, a barrage of criticism fell on Ula Schmidt who invited her driver to visit Spain at the expense of taxpayers. Chancellor Merkel has a special place in a long chain of corruption scandals. Journalists charged her with hosting a banquet in honor of birthday of Josef Ackerman, president of “Deutsche Bank” on September 27, 2012 at the expense of taxpayers.

Corruption scandals did not skirt around Guido Westerwelle, principal liberal of Germany, leader of the Free Democratic Party and Foreign Minister of the State. On the eve of enactment of the Law on VAT Reduction in Hotel Business by 12%, the Party of Westerwelle received in January 2010 a donation worth 1.1 million euros from a monopolist group Moevenpick. The money was granted by famous German oligarch, baron August von Fink. A representative of Westerwelle admitted a fact of the money receipt as saying that the Party, pursuant to its Charter, was entitled to accept donations. The German Foreign Minister justified the enactment of this law by the risk to lose 100.000 jobs. The German opposition and the public did not accept such explanation, saying that “the government exploits the state as a sinecure” (Renata Koenast, leader of “Greens”.)

The case of the Berlin airport

The construction of the Willy Brandt Berlin airport became a ‘talk of the town’ not only in Germany but in the entire Eurasia as well. The history of airport construction is an evident example of the fact that the systemic corruption in Germany petrifies the formerly effective managerial mechanism of large-scale projects. Why was the implementation of this mega-project of the Merkel Government incomplete?

A prototype of the Berlin airport was recognized by the architectural elite to be the world’s up-to-date structure. The point was about the construction of the whole city with an area of 1,500 ha, including an air terminal, overhead interchange, underground station, and numerous storeys with shops and offices. The new airport was designed to substitute three currently operating airports.

Initially, it was planned to complete the construction and open the airport in 2010; however, afterwards, the opening date was rescheduled for 2011, then 2012 and, finally, March 2013. Recently, the German authorities declared that the airport was sure to open in October 2013. The authorities were in a hurry to announce an exact date - October 27, 2013. However, an overwhelming majority of German population is confident that the airport will not be completed even in the end of 2013. Even local authorities of Berlin share this pessimism. The problem is that the new airport may become insolvent prior to its opening, as the authorities have confessed that more than 1 billion euros is short to complete the construction. Even worse, there are serious infrastructural problems arising from wiring, firefighting, contractors, management, etc. Instead of dismissal, the head of the construction Reiner Schwarz earns some 550,000 euros per year. According to Anton Hofreighter, head of Bundestag Transport Committee, every month of downtime costs developers at 20 million euros. A new postponement will cost 120 million euros. As viewed by experts from the anti-corruption organization “Business under Control”, the Berlin airport corruption costs exceed 3 billion euros.

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